How do the Valuation Office Agency decide property prices for council tax purposes?

housebuyer143

I was thinking on this today and wondered how they decide a houses value? What tools do they use to determine this?

Wales has decided today to do a revaluation of all houses based on 2023 prices (for changes to commence 2025), thus changing many peoples bands (sceptically I think most probably going higher). I was intrigued to know how they work this out on a grand scale like this? The Nationwide house price index is completely out by hundreds of thousands for some houses, tens of thousands for others, but spot on for a few that I checked (because they are using 2023 prices, its very easy to see how much these houses are worth), so they must use other methods to? 

Can anyone shed any light on what these are? I will certainly be keeping hold of my RICS valuation dated Jan 2023, in case I need to appeal the house value when they finally come out with them.

lincroft1710

I can only comment on the original 1993 CT valuation.


The VOA has actual details of 99.99% of all property sales, so could see (for example) what a 3 bed 90sq metre semi detached house was selling for in a certain area. Most of the banding exercise was carried out by local estate agents and surveyors on contract who had details of all the properties to be valued and were reasonably aware of prices in their area.


I have no idea how the Welsh VOA will tackle the revaluation as the technology has moved on a lot since I was in the VOA. As with the 2005 Welsh Reval, the bands will be completely revised, the 2005 Band A is up to £44,000. Can't find the 1993 figures, but the 2025 Band A figure will undoubtedly be higher.


 

Jaybee_16

https://www.walesonline.co.uk/news/wales-news/huge-changes-council-tax-wales-26828732

Reading through this article it seems the Senedd haven't decided yet.

housebuyer143

lincroft1710 said:

I can only comment on the original 1993 CT valuation.


The VOA has actual details of 99.99% of all property sales, so could see (for example) what a 3 bed 90sq metre semi detached house was selling for in a certain area. Most of the banding exercise was carried out by local estate agents and surveyors on contract who had details of all the properties to be valued and were reasonably aware of prices in their area.


I have no idea how the Welsh VOA will tackle the revaluation as the technology has moved on a lot since I was in the VOA. As with the 2005 Welsh Reval, the bands will be completely revised, the 2005 Band A is up to £44,000. Can't find the 1993 figures, but the 2025 Band A figure will undoubtedly be higher.


 

Thank you, that is interesting. The problem I see with the rebanding is South East Wales has very inflated prices now, while 20 miles North, you have very very low pricings. I see this rebrand as a way for them to generate more revenue from those who happen to live in areas which are close enough to Bristol & Cardiff and have therefore seen the value of their houses increase quite significantly in recent years. No one in these areas are guaranteed to be more wealthy than those living further out from the cities. 
Maybe it needs doing, but during a cost of living crisis with raging inflation and a stagnating housing market probably wasn't the best time to announce it...

Guess we will have to see what comes of it, but its good to know they don't just use a computer model to determine the values based on broad region percentage increases. 

housebuyer143

Jaybee_16 said:

https://www.walesonline.co.uk/news/wales-news/huge-changes-council-tax-wales-26828732

Reading through this article it seems the Senedd haven't decided yet.

It is all but put into legislation. The entire article reads as if its already been decided, esp the comments from the minister in charge of it. If you know the Welsh Government, they will press on ahead as they had already decided on the outcome they wanted long before the consultation (which the majority were against) was commissioned. 

daveyjp

VOA revalue all properties subject to business rates every 5 years (over 2m) so doing houses will be no different.

They take a sample which decides the 'tone' for an area and similar properties are given similar bandings.

It is far easier now than it was in the early 90s with the likes of Streetview, Land Registry open data and online resources.

lincroft1710

housebuyer143 said:

lincroft1710 said:

I can only comment on the original 1993 CT valuation.


The VOA has actual details of 99.99% of all property sales, so could see (for example) what a 3 bed 90sq metre semi detached house was selling for in a certain area. Most of the banding exercise was carried out by local estate agents and surveyors on contract who had details of all the properties to be valued and were reasonably aware of prices in their area.


I have no idea how the Welsh VOA will tackle the revaluation as the technology has moved on a lot since I was in the VOA. As with the 2005 Welsh Reval, the bands will be completely revised, the 2005 Band A is up to £44,000. Can't find the 1993 figures, but the 2025 Band A figure will undoubtedly be higher.


 

Thank you, that is interesting. The problem I see with the rebanding is South East Wales has very inflated prices now, while 20 miles North, you have very very low pricings. I see this rebrand as a way for them to generate more revenue from those who happen to live in areas which are close enough to Bristol & Cardiff and have therefore seen the value of their houses increase quite significantly in recent years. No one in these areas are guaranteed to be more wealthy than those living further out from the cities. 
Maybe it needs doing, but during a cost of living crisis with raging inflation and a stagnating housing market probably wasn't the best time to announce it...

Guess we will have to see what comes of it, but its good to know they don't just use a computer model to determine the values based on broad region percentage increases. 

It doesn't work that way.


All councils need to raise money to fund expenditure, only part of that money raised comes from CT. They cannot raise whatever they want to, their budget has to be reasonable. Let us assume that in 2024/2025 Welshborough council needs to raise £30m from CT. There are 20,000 dwellings in Welshborough all in Band D, so each dwelling will pay £1500 in CT. Following the Reval, all the dwellings in Welshborough are now Band G, but because of purse tightening by the council to combat inflation, for 2025/26 they still require £30m from CT, so each dwelling, despite being in a higher band will still be paying £1500